Paul Janisch

No, I'm not going to comment on Rob and his useless Licensing of Businesses Bill. What I will say is that Rob is single-handedly drowning South Africa in his sea of incompetence. Take a look at the documentary requirements under BEE and the capabilities of those people who are supposed to be running it in Rob's department - speaks volumes about the minister doesn't it.

So you want to be black by birth or descent, well then read on

We all know that the easiest definition of black is an African, Coloured or Indian who is a South African by birth or descent. But what we don't know is how to test that. As it turns out this is actually supported by an act, namely the South African Citizenship Act, no. 88 of 1995. And so spake the act

Citizenship by birth

2. (1) Any person-

(a) who immediately prior to the date of commencement of this Act, was a South African citizen by birth; or

(b) who is born in the Republic on or after the date of commencement of this Act; or

(c) who is by virtue of section 3(1)(b) a South African citizen, and one of his or her parents or his or her mother if he or she was born out of wedlock, was at the time of such person's birth-

(i) in the service of the Government of the Republic; or (ii) the representative or the employee of a person or an association of persons resident or established in the Republic; or

(iii) in the service of an international organisation of which the Government of the Republic was then a member,

shall, subject to the provisions of subsections (2) and (3), be a South African citizen by birth.

(2) No person shall be a South African citizen by virtue of subsection (1)(b) if, at the time of his or her birth, one of his or her parents-

(a) was a person enjoying diplomatic immunity in the Republic in terms of any law relating to diplomatic privileges, or was a career representative of the government of another country, or was a person employed in the embassy or legation of such a government or in the office of such a career representative, or was a member of the household or an employee of any such person; or

(b) had not been lawfully admitted to the Republic for permanent residence therein, and his or her other parent was not a South African citizen.

(3) No person who, after having ceased to be a South African citizen, at any time thereafter acquires South African citizenship by naturalisation in the Republic, shall be a South African citizen by birth.

(4) Any person born in the Republic and who is not a South African citizen by virtue of the provisions of subsection (2), shall be a South African citizen by birth, if-

(a) he or she is adopted by a South African citizen in accordance with the Child Care Act, 1983 (Act No. 74 of 1983); or

(b)(i) he or she does not have the citizenship or nationality of any other country, or has no right to such citizenship or nationality; and

(ii) his or her birth is registered in the Republic in accordance with the Births and Deaths Registration Act, 1992 (Act No. 51 of 1992).

Citizenship by descent

3. (1) Any person-

(a) who, immediately prior to the date of commencement of this Act, was a South African citizen by descent; or

(b) who is born outside the Republic on or after the date of commencement of this Act, and-

(i) one of whose parents was, at the time of his or her birth, a South African citizen and whose birth is registered in terms of the provisions of section 13 of the Births and Deaths Registration Act, 1992 (Act No. 51 of 1992); or

(ii) to whose responsible parent a certificate of the resumption of previous South African citizenship has, in terms of section 13(3), been issued, and who has entered the Republic for permanent residence therein before becoming a major, and whose birth is within one year after the date of issue of such certificate, or such longer period as the Minister in the special circumstances of the case may approve, registered in the Republic in the prescribed manner; or

(iii) who is adopted in terms of the provisions of the Child Care Act, 1983 (Act No. 74 of 1983), by a South African citizen and whose birth is registered in accordance with the provisions of subparagraph (i),

shall, subject to the provisions of subsection (2), be a South African citizen by descent.

(2) No person who, after having ceased to be a South African citizen, at any time thereafter acquires South African citizenship by naturalisation in the Republic, shall be a South African citizen by descent.

Is that a hole in your umbrella dear Cyril, dear Cyril?

-From: Admin [mailto:[email protected]]

Sent: 19 April 2013 03:44 PM

To: [email protected]

Subject: Application to access blackpages website declined

Dear Paul,

We regret to inform you that you have not complied with our requirements to gain access to blackpages website. Therefore you application has been declined.

Only buying organisations which would like to search blackpages for potential suppliers will be granted access.

We appreciate your interest in blackpages.

Yours in enterprise development (but not the ED of those who form part of our Umbrella)

Malope Mashifane

blackpages Project Manager

Tel: 010 590 5555

Fax: 086 219 5384

Email: [email protected]

Website:www.shandukablackpages.co.za

------------------------------------------------------------------------------------------------------------------------------

I assume then that these suppliers are in such demand that someone like me who has a definite need to find black suppliers is not needed to assist in their sustainability.  Italics are my emphasis

 

Gleason suggests we need a new trade and industry minister

And the place for President Jacob Zuma to start is at the Department of Trade and Industry. On Wednesday this newspaper reported on the latest survey conducted by the Global Entrepreneurship Monitor, which found that entrepreneurial activity in South Africa is in a state of steady decline, now at only 7.3%, and rapidly falling behind Argentina, Mexico, Brazil and Russia.

Has Davies read the National Development Plan (NDP)? His stewardship of his department suggests he hasn’t. The NDP is insistent that rules for small businesses must be eased; administrative and regulatory burdens on small businesses must be removed; regulations for reporting on employment equity and skills development should be simplified or even eliminated.

via www.bdlive.co.za

Bloody right. Robs is dangerous, clueless and incompetent - and this is measured against the likes of Tina and Dina. Do you know how incompetent you have to be to compete with those two? It's off the charts, stratospheric.....

Capital adequacy ratio explained. This is why we have direct and indirect ownership in the FSC

What really, is going to break the camel’s back as far as the banks are concerned, is the main issue of capital adequacy ratios or capital requirements.

Capital adequacy ratio is a measure of banks’ capital expressed as a percentage of a bank’s risk weighted exposure.

Also known as capital to risk weighted assets ratio (Crar), this risk is used to protect depositors and promote the stability and efficiency of financial systems around the world.

There are two types of capital that are measured: (i) Tier One Capital, which can absorb losses without a bank being required to cease trading. (ii) Tier Two Capital, which can absorb losses in the event of a winding-up and so provide a lesser degree of protection to depositors.

via www.moneyweb.co.za

This article relates to Zimbabwe's 51% bank indigenisation programme.

Mining Charter and beneficiaries

A journalist called me last night to ask me about the mining charter. I am quite familiar with it but it did require a little bit of touch-up research. The BEE codes of good practice are badly written, to put it politely, a feature that almost every other code that has followed the generic codes has adopted (the FSC is actually quite well drafted even though it does refer to the generic codes on occasion). And because the codes are not so much legislation but practice, the interpretations are very broad. The mining charter is very different – this document is analysed down to the last word by lawyers, not BEE consultants. So it follows that what we as BEE consultants might regard as being a simple typo, is regarded as something serious by a lawyer. For instance the mining charter calls for meaning economic participation – it means the HDSA (more on this below) shareholders must get some of the dividend money in their pockets and the balance used to service a debt. This has serious implications for shareholders.

The purpose of this post is the use of the term HDSA. This is a term that has fallen out of favour in the PPPFA which has replaced it with the word black. The mining charter defines HDSA as

"Historically Disadvantaged South Africans" ("HDSA") refers to South African citizens, category of persons or community, disadvantaged by unfair discrimination before the Constitution of the Republic of South Africa, 1993 (Act No. 200 of 1993) came into operation which should be representative of the demographics of the country

We must break this down into components to understand what it means

South African citizens, category of persons or community, disadvantaged by unfair discrimination

This is simple enough. We know from the HDI in the PPPFA that this includes white women

before the Constitution of the Republic of South Africa, 1993 (Act No. 200 of 1993) came into operation

The date of commencement of the Constitution is the 4^th of February, 1997. That is about 16 years and two months' ago.

which should be representative of the demographics of the country

The dreaded Economically Active Population (EAP).

What this says is that HDSAs must be reflective of the EAP (which puts African at about 85% of the population) and they must be older than 16 years, two months and 19 days (as of today). I suppose you could argue the Nasciturus Rule and include those children who were in utero 9 months before the 4^th of February, 1997. I think this is clear. But it does have an impact on HDSA's as beneficiaries. Under "Meaningful economic participation" in the charter it is stated that

BEE transactions shall be concluded with clearly identifiable beneficiaries in the form of BEE entrepreneurs, workers (including ESOPs) and communities

It is possible that the 16 year olds could find themselves as employees of a mine and be part of an ESOP, younger than 16 years olds could find themselves as members of communities. The only problem is that these people cannot be regarded as HDSAs by definition. They are too young to have suffered any discrimination before February 1997. What are we then left to assume – it must be that the usual suspects (ANC cadres typically) are the best beneficiaries for your mining deal.

I haven't run this past Percy Abelkop or Peter Leon. And I'm sure they are both aware of this. I suppose this is just another one of those ridiculousnesses that is contained in empowerment legislation. If you would like to read a very humorous article on the MPRDA you should read Peter Leon's tragicomic analysis of a good mining regime and how South Africa's is the antithesis of this.

What the law says — and means — on transformation: Paul Hoffman

It is perhaps significant that neither race nor gender is mentioned by Parliament. The quest for a nonracial and nonsexist order in South Africa calls for a transformation of mindset, not a counting of chromosomes and measuring melanin cells. Perpetuating racism and sexism in the JSC’s processes is not what the law intends.

via www.bdlive.co.za

Such a pertinent concluding paragraph.  Hoffman refers to the Manyist definition of black earlier in the article.  It seems that HF Verwoerd's legacy is a huge inspiration for our ANC legislators.  Who'd have thought that the architect of apartheid has become the darling of the formerly oppressed.

Some commissioners interpret this to mean that when the judiciary is 5% white men, 5% white women and 45% black men, with 45% black women making up the numbers (let us leave out the odious race classifications that should have died with apartheid but linger on like a bad smell), a nonracial and nonsexist judiciary will be achieved. On this interpretation, the words "broadly" and "must be considered" are given a strangled meaning that leads to an outcome that would make Hendrik Verwoerd and all other social engineers proud.

I think the thing that would have impressed Verwoerd the most is that the man who is in charge of creating the most racist policy since the Group Areas Act is in fact white.  He would have loved to have a strong black anti-black activist.

Delinquent, or absent shareholders and ownership - repost

This post was originally published in April 2013.  Please excuse the indulgence of the repost.  What is interesting is that certain links in the original post are now dead. I've had to look for new ones.

 

The BEE world is really for the good times. Empowerment likes the idea that companies make money and black shareholders get rich. It doesn't do the bad times very well, for instance if a black shareholder is unable to meet the payments for the shares then the company is penalised under the ownership scorecard. What happens if you have a black shareholder who actively does not wish to exercise his shareholder rights. In other words, what do you do with a delinquent shareholder.

Ownership is measured by both voting rights and economic interest. Lesley Fodor has in a comprehensive article on voting rights and shareholders' meetings, writes (on the issue of voting rights) - the original link has broken, sorry Lesley.

The primary rights of shareholders relate to their entitlement to vote at meetings of the shareholders. While this does not confer a direct role in management of the company (this function falling within the purview of the directors), the directors are required to implement those decisions of the shareholders, which are reserved to them.

It follows then that voting rights must be EXERCISABLE. If restrictions are found it's likely that the voting rights' points won't be awarded. If you are interested in a summary of shareholder rights have a look at this post.

That's voting rights sorted. Economic interest is simply (to quote Kyle and Vuyo, page 192) "the basic monetary right of ownership. It refers to an ENTITLEMENT of black people to dividends, capital gains and other economic rights of shareholders." The operative word is ENTITLEMENT. The word does not mean that the person needs to receive cash directly through dividends, there may be an agreement that dividends will be used to settle a debt first and only then will the shareholder get that cash. Any restriction on this entitlement would be considered in determining whether the economic interest points will be allocated. An unreasonable restriction will in all probability not make it through a verification (I really do give verification agencies a lot of credit when it comes to understanding company law).

Say now you have shareholder that is entitled to vote at a shareholders' meeting but chooses not to. I am aware of a specific case where a shareholder has a majority stake in a company and doesn't seem to get on with the other shareholders and as such doesn't vote or pitch to shareholders' meetings. There's no legal reason why he can't; it just seems that he doesn't want to. This example has an interesting issue when it comes to dividends. Dividends can only be declared when a profit is made, the company in question has yet to make a profit and as such hasn't declared a dividend. The shareholders' agreement has this to say on distribution of dividends.

The shareholders shall procure that the Company shall….. declare and pay dividends equal to a percentage, to be determined and recommended by the board of directors, of the distributable profits of the Company.

This was a problematic paragraph for me but I spoke to two lawyers who both confirmed that the directors cannot distribute dividends on a whim contrary to the percentage shareholding of each shareholder. In other words if you own 25% then you will get 25%.

In this case we have a shareholder who doesn't want to vote and who has never received a dividend because the company hasn't made any money yet. This same shareholder would be described as black and therefore is very beneficial to the company's BEE credentials. That's where the simplicity stops. The company's BEE scorecard considers four other elements and ignores the ownership element – even though the company is in fact (and in law) 51% black owned. It would seem that the verification agency refused to consider this element because they could not interview the shareholder – a requirement that comes from the Udge-approved verification manual; viz paragraph 7.1.6 which states that a verification agency must

Interview a sample of the black shareholders to determine whether they understand their voting rights and whether they have exercised such voting rights independently

This cannot be regarded as fair on the company. There are no restrictions on the ownership in any shape or form, it is only the personality of the shareholder that gets in the way of the allocation of ownership points. Unfortunately there is nothing in any of the BEE information including Vuyo's Book (he does like Black with an uppercase B) that anticipates this situation even though I would suggest it is very common.

We need a solution; what I recommend is that the company follows the procedural guidelines listed by BDO and Fodor and if the shareholder chooses not to attend then that shareholder has not been denied their rights. This is the same argument that I have put forward for this case.

The problem with South Africa is that everybody wants to govern

So says Zoomer in today's BDLive

via www.bdlive.co.za

Bullshit you incompetent nicompoop.  We want YOU to fucking govern, right now a two year old could do a better job than you.